Diplomatic Spin: EU3+3 talks on Iran’s nuclear file. CEPS Commentary, 21 November 2014

The Joint Plan of Action agreed upon with Iran on 24 November 2013 gave negotiators one year to forge a comprehensive agreement that restricts the country’s ability to militarise its nuclear programme. That deadline will lapse in the next few days and diplomats involved in the talks have been trying to rein in expectations that a deal will be struck on time. Satisfying domestic constituencies in Iran and the US is what makes the politics of dealing with the nuclear file so much harder than the physics of slowing down the nuclear programme. Any future deal will have to stand on its own merits, enabling Iran and the EU3+3 to cooperate on the other geopolitical challenges they face. Both parties should therefore balance their demands with what they can realistically offer and make concessions to reach a compromise. The author of this CEPS Commentary argues that if no deal is reached on November 24th, then diplomacy should be allowed to keep on spinning for a few more months.

Should the ‘outs’ join the European banking union? Bruegel Policy Contribution Issue 2016/03 February 2016

For political reasons, European Union member states’ opinions on joining banking union range from outright refusal to active consideration. The main stance is to wait and see how the banking union develops. The wait-and-see positions are often motivated by the consideration that joining banking union might imply joining the euro. However, in the long term, banking union’s ultimate rationale is linked to cross-border banking in the single market, which goes beyond the single currency. This Policy Contribution documents the banking linkages between the nine ‘outs’ and 19 ‘ins’ of the banking union. We find that some of the major banks based in Sweden and Denmark have substantial banking claims across the Nordic and Baltic regions. We also find large banking claims from banks based in the banking union on central and eastern Europe. The United Kingdom has a special position, with London as both a global and European financial centre. We find that the out countries could profit from joining banking union, because it would provide a stable arrangement for managing financial stability. Banking union allows for an integrated approach towards supervision (avoiding ring fencing of activities and therefore a higher cost of funding) and resolution (avoiding coordination failure). On the other hand, countries can preserve sovereignty over their banking systems outside the banking union.